Between 2010 and 2014, the number of high net-worth individuals (HNWIs) in China doubled, thanks in large part to emerging industries such as technology and alternative energy. These HNWIs are naturally seeking safe investments for their new-found wealth, and the European real estate market is currently reaping the benefits.
London has long been seen as a safe haven for Chinese investors, but in recent years many other European cities have come to rival its dominance. Madrid and Lisbon particularly have registered notable interest, with almost one in five property purchases in the Portuguese capital last year made by a Chinese national.
“European property has always been a well-functioning asset and is highly attractive from a Chinese portfolio management standpoint,” explains E&V Berlin Managing Partner Sebastian Fischer. “Interest has risen due to the weaker euro and insecurities on Chinese stock markets.”
The Financial Times reported that Chinese buyers had accounted for 11% of property purchases worth over £1 million in London in 2014. Australia, Canada and the United States emerged as other favoured locations. Over the summer of 2015, an even greater surge in interest was registered as Chinese buyers reacted to the turmoil of the Shanghai stock market.
Although traditionally investors have sought out townhouses and penthouse apartments in global cities, a recently observed trend has seen HNWIs turn to historic estates in rural France, Germany, Britain and Spain. Among the most popular European destinations for Chinese buyers is Bordeaux, famed as a centre of French viticulture. As of March 2015, Chinese landowners are responsible for more than 100 vineyards in the area: 1.5% of the region’s total number. Given that China is the largest non-EU export market for Bordeaux wine, it’s easy to understand the region’s appeal.
One of the first Chinese property tycoons to invest in Bordeaux was Cheng Haiyan, who purchased the Château Latour-Laguens in 2008 after being captivated by its historic charms. Film star and director Zhao Wei reportedly bought the Château Monlot and its vineyard, also in Bordeaux, for over €4,000,000 in 2011.
Investing in a historic property is a complex and lengthy process, making owning a castle or stately home an even more exclusive symbol than a sprawling townhouse. China has long been noted for its devotion to rare antiques, with auction houses registering Chinese buyers paying up to 30 times the expected price for British and continental European treasures. These magnificent ancient properties represent the most valuable antiques of all, making them the ideal addition to a truly devoted collector’s portfolio.
Of course, the purchase of historic properties isn’t entirely attributable to an appreciation of aesthetics. These estates can be turned into profitable luxury hotels or museums, or, in the case of the Bordeaux homes, revived as boutique wine producers. A prime example is the 500-year-old Ram Brewery in west London, which was acquired by China’s Greenland Holdings Group in 2014. The investors’ ambitious plan will transform the property into houses and shops, with a museum of brewing to pay tribute to its heritage.
If you are considering investing in an historic European property, visit Engel & Völkers online or in-store. Our expert real estate agents represent an exclusive range of castles and mansions located all across the continent.